Proposed Reduction And Ultimate Cessation Of Airline Services Provided To AirAsia X Sdn Bhd

BackJun 08, 2010


Type Announcement
Subject Proposed reduction and ultimate cessation of airline services provided to AirAsia X Sdn Bhd
Contents 1. Introduction

On 31st October 2007, AirAsia Berhad (“AirAsia” or “the Company”) entered into a Services Agreement (“the Agreement”) with AirAsia X Sdn Bhd (“AAX”) for the provision of airline services to support AAX’s Budget Long Haul Service (“the Services”). On 28th November 2008, the terms and the fee structure of the Agreement were amended.

2. Proposed Reduction of Services

Under the terms of the Agreement, the Company has agreed to provide a host of airline services to AAX which among others include Engineering, Cargo, Flight Operations, Procurement, In-flight Sales, Treasury, Human Resource, AirAsia Academy (Training), Communications, Information Technology, Ground Operations, Security, Ancillary Revenue, Commercial, Sales & Distribution, AirAsiaGo, Go Insure and Investigation.

Further to a joint press release by AirAsia and AAX today, AirAsia is pleased to announce that AAX’s reliance on AirAsia for the Services will see a gradual cessation within the near future and except for three core areas, AAX’s operations shall be completely independent of AirAsia’s.

The three core areas are:

(a) the use of the AirAsia brand;
(b) the use of the website (both as part of its 30-year Brand License Agreement with AirAsia) and AirAsia’s internet facilities; and
(c) the use of the AirAsia Academy and training facilities.

It is contemplated that organisationally, AAX will take over employment of its own wide-body aircraft pilots, cabin crew and ground staff as well as maintain its own commercial and marketing teams.

3. Extension of the Services Agreement

The above proposed reduction and ultimate cessation of certain Services is subject to the formalisation of the extension and/or variation of the current Services Agreement which shall take into account the specific requirement and duration of each of the Services (if any) still required from AirAsia. A further announcement will be made to Bursa Malaysia upon execution of the extension and/or variation of the Services Agreement with AAX.

This announcement is dated 8th June, 2010.



Announcement Info

Stock Name AIRASIA    
Date Announced 8 Jun 2010  
Category General Announcement
Reference No CMC-100608-BD28A